Welcome to the Desert of Post-Socialism

Radical Politics After Yugoslavia

Srecko Horvat, Igor Štiks, Srecko Horvat, Igor Štiks

• Publisher: Verso
• Year: 2015
• Print ISBN:
  9781781686201
• eBook ISBN:
  9781781687376
• Topic: History
• Subtopic: Russian History
• Index: History

This volume offers a profound analysis of post-socialist economic and political transformation in the Balkans, involving deeply unequal societies and oligarchical "democracies." The contributions deconstruct the persistent imaginary of the Balkans, pervasive among outsiders to the region, who see it as no more than a repository of ethnic conflict, corruption and violence. Providing a much needed critical examination of the Yugoslav socialist experience, the volume sheds light on the recent rebirth of radical politics in the Balkans, where new groups and movements struggle for a radically democratic vision of society.

PART I

From Self-management to Disaster Capitalism

CHAPTER 1

Self-management, Development and Debt: The Rise and Fall of the ‘Yugoslav Experiment’

Vladimir Unkovski-Korica

For a long time during the Cold War, Tito’s Yugoslavia was a symbol of a ‘third way’ between the superpower blocs. Worker self-management, or ‘market socialism’, in which workers played a role in the management of their workplaces, promised to be an alternative to both private property and the state as the dynamo of development. The failure of the ‘Yugoslav Experiment’ and the ensuing bloody disintegration of the country itself at the end of the Cold War has been trumpeted widely as proof that ‘workers running factories’ was, to put it euphemistically, a bad idea. This has been accompanied by the claim that there is no alternative to liberal democracy and market capitalism. Nevertheless, the growth of the global anti-capitalist movement and the breakthrough of political parties with an anti-neoliberal agenda, especially in Latin America, slowly put alternatives back on the map. The recent onset of what has come to be termed the ‘Great Recession’ will only intensify debates about alternatives to capitalism. It is in that context that an investigation of the ‘Yugoslav Experiment’ takes on significance. There are still enthusiasts who suggest that the model is worth emulating on one level or another. This contribution will emphasise the negative lesson of the ‘Yugoslav Experiment’: that the top-down institutionalisation of worker participation and its subordination to the market is inimical to the emancipatory project of non-capitalist development. Rather than accepting that the problem in Yugoslavia was lack of market integration, it will show that market integration systematically undermined development and the promise of worker management. Any alternative in the future will need to come from below and emphasise solidarity against competition to avoid repeating the mistakes of the past.

The Origins of the System, 1948–1950: ‘Factories to the Workers!’

The ‘Yugoslav Road to Socialism’ emerged from a mass movement, a peasant-based, anti-fascist resistance led by the Communist Party during the Second World War. The Yugoslav communists hoped to emulate and supersede the Soviet Union’s state-led developmental path of the interwar period, and to lead their country out of underdevelopment and end its dependence on the West. Dizzy with their wartime success, they believed they were embarking on this task from a higher stage of development than the Soviets had done several decades previously. They also believed that international relations were more favourable to development than in the interwar period, with socialism on the advance across the globe. Not just in the Soviet Union, Eastern Europe and the Balkans, but in Western Europe, China and Vietnam, communist parties appeared to be on the cusp of power or were already holding important positions in ruling coalitions. With the fraternal help of the USSR, Yugoslavia could hope, perhaps as part of a Balkan federation, to advance towards a diversified and open economy within the space of a single five-year plan. It was not to be. Tito’s refusal to submit to Soviet domination in the emerging Cold War resulted in confrontation with Moscow. The Tito–Stalin split of 1948 stunned the world and set back Yugoslav communist ambitions. Facing a blockade and even possible invasion from the nascent Soviet bloc, Tito’s Yugoslavia soon leaned westwards for aid and security. But Tito was still convinced that Yugoslavia should remain independent. More than that, he told the Central Committee in 1948 that he wanted Yugoslav development to be ‘a big, beautiful contribution to the progressive movement in the world’, a symbol for the likes of ‘Burma and other countries’.¹

This was like walking a tightrope. On the one hand, the Yugoslav communists had to soften their image and differentiate themselves from the USSR to gain aid from the West. On the other hand, they wanted to appeal to a radical global audience, especially in the developing world. It was in this context that the idea of self-management emerged. Milovan Djilas, then a member of Tito’s inner circle, and later Yugoslavia’s most famous dissident, captured the top-down spirit in which the decision was taken, even if his own version of events is overly simplistic. He wrote in his memoirs that the idea of worker management of economic life originated with three top communists who sought Tito’s approval to put the idea into practice. Pacing up and down, Tito finally exclaimed, convinced: ‘Factories belonging to the workers – something that has never yet been achieved!’² The actual process of decision making was, of course, far more complex but the ideological power of worker management in terms of raising Yugoslavia’s profile abroad was certainly crucial. Historians claimed for a long time that the Communist Party’s Central Committee never mentioned workers’ councils in the period 1948 to 1950, when the institution was finally officially promulgated into law, but this is incorrect. The Party’s chief ideologue and foreign minister, Edvard Kardelj, in fact delivered a speech on foreign policy issues to the Central Committee at the close of 1949 in which he did mention workers’ councils. He argued that ‘the strengthening of the democratic relations in our production – with the formation of workers’ councils, of which we have spoken, it seems to me, almost a year ago, as well as all the other forums [of popular participation] – is exactly that which we shall be able to present to the world as the difference between us [Yugoslavia] and them [the East]’.³ Self-management differentiated Yugoslavia from the USSR not only in the minds of its creditors, but also in the minds of those who Yugoslavia could look to as friends and who could prevent political strings being attached to aid: social democrats in the West.⁴

Thus, while the external environment was the decisive factor behind the decision to introduce self-management, it was not the only one. The Yugoslav communists also had to respond to a specific mood from below. Under threat of foreign invasion, they relied both on intensified political repression and on renewed political mobilisation of their wartime base to retain power and maintain production. The renewal of political mobilisation involved decentralisation. The hope was that this would strengthen Yugoslav unity by giving the constituent republics of the federation a greater say, and that bringing government closer to the people and renewing the Partisan spirit would legitimise communist rule and Yugoslav patriotism. Indeed, patriotic appeals to increase industrial production and administrative measures to recruit new workers from the countryside did work and helped stave off economic collapse, but they also proved expensive and disruptive of agricultural production. Management tried to build up reserves of labour, especially skilled labour, in order to meet targets. This meant they paid higher wages than the government envisaged and this money often served as the basis for the emergence of a black market, trading with the countryside for food and other consumer goods. These policies could not be a long-term solution.

It was in this context, in late spring 1949, and in the thick of the production drive, that self-management as an idea was born. It was at first part of a number of strategies designed to empower workers’ initiatives against conservative management layers. The government hoped that the councils could use labour and organise production more rationally than the existing system, which was often chaotic. It also believed that this was a way to reverse the trend of ballooning wage demands. For a time, the plan met union resistance, since the draft bill envisaged workers’ councils usurping union prerogatives as the transmission belts of industrial policy. By the time the councils were being implemented on an experimental basis in key industrial plants at the turn of 1950, the government had regained the upper hand. In late summer, confirmation came that foreign aid was on its way. Moreover, Yugoslavia’s election to the UN Security Council in late 1949 had staved off the threat of war. The government reversed labour mobilisation, allowing many to go home to the rural areas. The government and the unions co-signed the directive instituting experimental worker councils in industry. At that point, councils were given oversight competencies but had no real power over management. The aim was to increase labour participation but tighten financial discipline without the need for state intervention, and to build the unions into the new system of labour management rather than have them oppose it.⁵

The First Phase of Self-management, 1950–1961: Growth of a Subsidised and Protected Market

The new system therefore sought to harness but also channel and limit popular participation, allowing government to retain its policy-making initiative. This was clearly not a genuinely democratic system, but it did create forms of pluralism not seen in the rest of the Soviet bloc. The official claim was that Yugoslavia was building a new system in which the state was withering away, in contrast with the East and West, where its influence was growing. The process of extending self-management from the workplace to the political sphere began in June 1950, with the adoption and broadening of the scope of worker-management across industry, and ended in January 1953, with the enactment of a ‘mini-constitution’ which introduced ‘councils of producers’ as legislative chambers at all levels of the state. Self-management had thereby become the building block of a decentralised economic and political system, embedded in a complex multinational and federal setting. The Party itself made a concerted effort to dismantle command structures and even reduced its own professional apparatus in order to force its membership to adapt to the new environment. The Party’s new role was no longer to command but to lead by persuasion. The Party even changed its name in 1952 from the Communist Party of Yugoslavia to the League of Communists of Yugoslavia (LCY) to symbolise the change. While this soon led to major disorientation and demobilisation in the League and the mass organisations subordinated to it, the communist leadership appeared set on underlining the country’s departure from the Soviet model. This new ‘commune state’ of mass participation placed itself in the tradition of Lenin’s State and Revolution against the ‘state capitalist despotism’ prevailing, according to Yugoslav communist ideologues, in Stalin’s USSR.⁶

The gap between theory and practice soon became obvious, but it disappointed intellectuals quicker than workers. Djilas was among the first to criticise the bureaucratic alienation and ostentatious privilege of the communist leadership. Some years after he was purged, Djilas argued that the system had bred a ruling communist ‘new class’. In his extensively documented study of Yugoslav elites, the Western sociologist Leonard J. Cohen also found that ‘conformity and political careerism replaced the revolutionary outlook or Partisan political culture which had predominated during the war years’.⁷ This ruling bureaucracy was secure in power but its primary purpose and characteristic was not in fact to consume surplus extracted from the workforce. It saw itself rather as the moderniser of the backward country it had led to independence. Raising the country’s industrial capacity to safeguard independence became its prime motivating concern. Dijana Pleština, in her study of regional development in Yugoslavia, interviewed leading economic policy makers of the time. She quotes Svetozar Vukmanović Tempo, chairman of the Federal Planning Commission, as saying that ‘the main issue was the accumulation of capital’.⁸ She noted that, among policy makers, ‘the feeling predominated that whatever was built, wherever it was built, would be all right, since lacking “everything”, “anything” would be useful’.⁹

Yugoslavia was indeed among the fastest-growing economies of the 1950s, possibly second only to Japan, and this growth did not appear to come from a brutal squeeze on living standards. The endeavour to maintain high investment rates through the 1950s was based on transfers of labour and value from the countryside but also on foreign aid and loans. In order to ‘drive a wedge’ into the Soviet bloc, the US had decided to send funds to ‘keep Tito afloat’.¹⁰ For instance, in this ‘period of uncertain policy orientation and uncertain performance in agriculture, the Yugoslav authorities had little need to worry about food supplies to the growing towns’ because of US food aid.¹¹ Living standards fluctuated in the 1950s and consumption probably did not reach pre-war levels until 1960.¹² Nevertheless, policy makers were adamant that there had been an increase in the social wage in the form of welfare. Their choice of concentrating on communal goods was largely aimed at stopping the fluctuation of the labour force between urban and rural areas.¹³ All this appeared to result in growing optimism and participation by workers in the system. Labour productivity rose, as did rates of participation in organs of management. Sociological studies found that areas under discussion by the workers’ councils were also increasing. That was despite the continued predominance of issues relating to the rationalisation of production, as opposed to business operation. Finally, even though studies suggested workers did not feel they ran their workplaces, rank-and-file satisfaction with the councils was ever greater in the 1950s.¹⁴

Beneath the surface, however, dramatic change was under way and it would soon lead to a confrontation that proved crippling for the future of Yugoslavia. Precisely because a growing economy was important for the maintenance of national independence, quick returns on investments became ever more central to the calculations of the Yugoslav communist leadership. Market measures became ever more pervasive. At first, the marriage of self-management with ‘socialist commodity production’ meant that there was an attempt to provide material incentives for workers through the creation of a finished goods market. The use of market forces was, however, slowly expanded. The centralised determination of wages was abolished after 1955 and a new income-sharing system was introduced in 1958. Workers no longer received a wage from an employer. They now had the right to an income on account of their membership of a work collective which enjoyed usufruct over its workplace. This meant that, since the workplaces were social property, the worker collectives had the right to run and benefit from their workplace, but within certain legal limitations, like paying various taxes according to government regulations, which were often justified by references to the common good or national interest. In the words of Yugoslav economist Rudolf Bićanić, the result was that personal income was ‘no longer an independent variable, but a function of the proceeds, business gains and losses of the enterprise’.¹⁵ Distribution was ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• Acknowledgments
• Introduction: Radical Politics in the Desert of Transition Igor Štiks and Srećko Horvat
• Part I: From Self-management to Disaster Capitalism
• Part II: Re-imagining the Post-Socialist Balkans
• Part III: Two Decades After Yugoslavia: Bitter Fruits of Transition
• Part IV: Towards a Balkan Spring? New Political Subjectivities
• Postscript: The Future of Radical Politics in the Balkans – Protests, Plenums, Parties Igor Štiks and Srećko Horvat
• List of Contributors